Well persons to stay usually mean occupiers. If 8 persons are staying on a premises which is rented out to 5 persons you appear to be in breach of your lease. He could either terminate your contract or renegotiate the term. He had chosen the latter. I cannot on the quantum of increase as I do not know in which neighbourhood are you residing. If you cannot he could terminate your lease. He could not legal forfeit a lease but it is the usual practice to defray his losses.
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Circumnavigator, lawyer and columnist and the man who divides his time between Singapore, Hong Kong and China. I believes that etiquette transcends nationality and race. 
In this column I will offer stylish advice to everyday questions on etiquette at work and at home and anything else that may be bothering you.